This may be Nepal in a microcosm: a knife-edge ridge not more than five metres across in places, a cluster of houses, a barrack, a CDO office, police station and helipad.

The district headquarter of Kalikot is a gunboat floating in a Maoist sea. Food, fuel, gin are all supplied by air. The only reason the Maoists haven't attacked is because Manma is protected by topography and landmines. The rebels may not even need to capture the town: government control goes barely beyond 20 metres below the crest of the ridge. The Maoists hold sway over all the 30 VDCs in this rugged and roadless district in western Nepal.

Manma's population has swelled because of the influx of refugees, families of those killed or threatened by the Maoists. It is now a fortress prison, villagers can't come in and townspeople don't go out. Living in this bubble are elected VDC chairmen, ex-MPs, local representatives of the parties, civil servants, all surviving on rice flown in from Surkhet.

Since 2002, the people's representatives have been in limbo, this means no accountability in public spending. "We saw the Panchayat, we saw multi-party democracy, but never have we seen corruption as bad as this," says Tula Raj Bista of the UML. Bista has kept careful record of the Rs 500,000 that Kathmandu doles out to each VDC.

No one from Manma can go to the villages, so the bureaucrats and officials have pocketed the Rs 1.5 million meant for 30 VDCs this year by faking suspension bridges, apple orchards and roads. "On paper, they showed 100 percent targets met and collected the money, not even zero percent of the work has been done," Bista adds angrily.

Manma never had a road, the Karnali Highway is being blasted out of solid rock, and even if the Maoists allow construction it is still three years away. The district has no airfield, work on the runway at Kotbada has stopped because the 300-strong army platoon there couldn't convince the contractor it was safe.

Phones have been out since the army cut 100 lines and the Maoists blasted the tower. The CDO censors all news going out. The district hospital doesn't have a doctor, no medicines are going to village health posts. The only relief agency, WorldVision, has been hounded out by the administration, the WFP/GTZ food for work program has been suspended after the Maoists demanded a cut. Most teachers have abandoned their schools, there has been no postal service since 1999. None of the VDCs are functioning and nominated members don't dare go to their villages. No one sees the possibility of meaningful elections being held here.

Tek Bahadur Shahi is from the prime minister's NC-D party, but he has lost all hope: "We live like prisoners here, Kalikot is going back to the 18th century."